Monday, October 7, 2013

OVDP Closed During The Government - IRS Shutdown.


We originally posted on Tuesday, October 1, 2013, "IRS Operations Limited During The Government Shut Down!" regarding that due to the current lapse in appropriations, IRS operations are limited. Now Anthony Parent has posted that he heard from a senior level OVDP examiner that all those additional IRS examiners that were going to be hired last year for the OVDP and all that press we've read about these hiring's; well they never happened because of Last Year's (2012) Budget cuts. Cuts that had nothing to do with this shutdown.

As of today, 17% of the Federal Government is currently  shutdown. Along with war memorials, scenic overlooks, the Amber alert system,  90% of the IRS is shut down as well and part of this 90% is the Offshore Voluntary Disclosure Program (OVDP) employees.

  1. So any OVDP disclosure goes to three places—the gatekeeper is in Philadelphia, the place where preclearances are sent, questions are asked, etc. They get intake documentation and send out acceptance letters into the program.
  2. Taxpayers them send their full submission, with returns, FBARs, consents, supporting statements, etc., to the Austin address where they are gathered and assigned to an examiner in one of many field offices.
OVDP process chart

From bottom to top, how your OVDP case will move through various OVDP departments until your 906 or opt-out

The shutdown means:

  1. First and foremost that step 1 in Pennsylvania is shut down—the hotline itself is closed, with a message similar to all IRS lines (will reopen and start making calls as soon as possible). It also means that no one is processing pre-clearances or sending them out, processing intakes, or sending acceptance letters. And they may be backing up further and further right now.
  2. Secondly, the Austin office isn’t assigning out submissions. This is already a slow part of the process, where our clients often wait six, nine, twelve months after full submission to be assigned to an examiner. The backlog seemed to be clearing up, but it is possible that this will strike a blow at any progress made. and
  3. Finally, some individual examiners are currently working, but thus far I’ve only spoken to one—most have a message on their voice mail saying they are out until further notice and will deal with things as soon as they return.

We have yet to see how this affects the “deadlines” set by the program, which are generally unenforced in the best of times. The truth, which all participants know, is that the OVDP is backed up and getting more backed up by the day, more submissions than they can handle and not enough staff to deal with it. A senior revenue agent recently told Anthony Parent that they had been expecting a group of new hires to handle the volume and that has now been eliminated.

Add to that piles and piles of mail stacking up in Philadelphia, in Austin, in Florida, in New York, and it means that if you’re curious how this affects you, no matter where you’re at in the process, the answer is the same: It’s going to take a long, long time.  Ultimately we’re at the whims of the service, and as long as the doors are shuttered, deadlines march on, interest accrues, and cases will wait.

IRS Tax Procedures Got You Confused ?

Contact the Tax Lawyers at
Marini & Associates, P.A.
for a FREE Tax Consultation
or Toll Free at 888-8TaxAid (888 882-9243 begin_of_the_skype_highlightingEE end_of_the_skype_highlighting).


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